There are many situations that depend upon the return of items. For example, in a remanufacturing business, worn products, components or parts are rebuilt or remanufactured to be resold. Depending upon the remanufacturing process, such items may be as good as, or nearly as good as, new and carry similar warranties. Yet these items can typically be sold at lower prices than a new item, which makes them economically attractive to customers.
These worn items are sometimes called cores in a remanufacturing business, especially in the automotive or industrial sectors. A core, for example, may be as large as an engine. Cores may also be smaller components or parts such as pumps or crankshafts. In order for a remanufacturing business to be able to remanufacture cores for resale, it must obtain the cores. And it is important to assure the supply is consistent and of sufficient quality to schedule the remanufacturing process and assure customer needs are met.
Typically, the remanufacturing business will purchase cores, but there are varying ways to assure the supply of the cores to be purchased. Most commonly, when a remanufactured item is sold, a core deposit is required. A core deposit represents value paid by the purchaser of the item against the return of the core. The purchaser will then have an economic incentive to return a core.
The acceptance of core deposits creates a liability to the remanufacturing business. That is, the remanufacturing business will owe the purchaser the amount of the core deposit for return of a core. In large remanufacturing businesses, the acceptance of core deposits and returned cores can be complicated because of the volumes involved and the use of intermediate parties such as distributors or dealers. It is also important to manage the liabilities, so that the remanufacturing business understands, among other things, its financial position, whether returns of core deposits are being properly made, and the availability of cores for remanufacturing.
Many methods are used by remanufacturers to account for the receipt of cores, their inspection and subsequent return of the core deposit. However, problems may arise. Cores are not always returned immediately or at all. The liabilities for core deposits thus may remain for lengthy periods without resolution. It will be further appreciated that tracking cores from multiple sources through a distributor or dealer to the remanufacturer, and managing attendant liabilities, is complex. Additionally, remanufacturers have a need from time to time to encourage and accept cores that are in addition to those related to the sale of items. Remanufacturers will do this to increase production of remanufactured parts or supplement normal core returns where, for example, purchasers are not returning cores in sufficient quantity or of sufficient value.
There have been various approaches to addressing issues such as discussed above. For example, liabilities beyond a certain age have been cancelled based upon intervention at discrete intervals to determine whether core deposits have been held beyond certain times. The typical approach has been to cancel core deposit liabilities in blocks, meaning all core deposits in their entirety prior to a certain date may be cancelled. This is done without considering the individual age of each core deposit. Core deposit liabilities have been cancelled beginning with the earliest ones first. This has been done to reduce the outstanding ages of the liabilities, but complex systems that manage such a level of detail have not been successfully applied.
Another approach has been to cancel core deposits on a rolling forward basis. In other words, a query is made for a time period (such as a particular month) to see what core returns were made in that month. These core returns are then used to offset the appropriate number of core deposits from the group of core deposits not already paid back and shown as available in that month.
From time to time, it is beneficial to raise the core deposit amounts purchasers must pay. This may be done to encourage more core returns or to reflect the market for remanufactured parts. Price increases on core deposits can cause considerable confusion where individual transactions are not controlled and liabilities remain outstanding for lengthy periods. This is partly because cores associated with different value deposits are returned at random and by different participants in the process. It is desirable a core at one price should offset the liability of a core deposit at the same price.
No effective way has made itself apparent to change the core deposit amounts required from time to time without affecting all liabilities in the system. That is, without the ability to manage at the core deposit and core return level, all existing liabilities would also need to be raised at the time of price increases. This would expose the remanufacturer to additional liability for which it had not received deposits. This not only disadvantages the remanufacturer on core returns, but also on the return of unsold, remanufactured items. It will be appreciated, therefore, that businesses relying on the return of items require approaches to carefully manage the returns, particularly vis-à-vis liabilities created by deposits to be refunded at the time of those returns.
The present invention is directed to overcoming one or more of the problems set forth above.